The cola wars between Coke and Pepsi have been an ongoing battle for over 100 years and I am sure it will continue for another century or more.
 
During the 80’s the battle really heated up when Pepsi launched the Pepsi Challenge campaign that saw punters try blind taste tests of Coke and Pepsi to choose which tasted better. Pepsi being sweeter than Coke often won out in the taste tests and consumers started switching.
 
This campaign was finally the push Pepsi needed to make headway and steal market share from Coke. In fact, by 1983 Pepsi was outselling Coke in supermarkets leaving Coke to rely on soda machines and their fast food agreements to not be completely outsold.
 
And it was at this point that both companies, both too focussed on what the other was doing, took their eyes off their own long-term strategic plans.
 
Pepsi, realising they were making a charge on Coke, decided they were going to be the number cola brand in the USA no matter the cost.
 
Coke, concerned about losing their market share because of the high profile taste test campaign changed it’s flavour profile.
 
The outcome.
 
Pepsi did become the number 1 cola brand in the USA for that year – at a massive financial loss that almost crippled the company.
 
Coke fans severely backlashed at this new flavour leading to massive loss in sales that even resulted in some bottlers suing Coke for loss of earnings due to the flavour change.
 
Neither brand won the war.
 
Pepsi needed to decrease it’s marketing spend which impacted sales.
 
Coke needed to change the flavour profile back to the original
 
Market share went back to what it was.
 
So what can we learn from this in our businesses?
 
Stick to YOUR plan. Don’t change your entire strategy because of what your competitors are doing. Be aware of what they are doing. But don’t knee-jerk react to it.
 
Worry about YOUR customers and what you can do to better serve them instead of trying to steal someone else’s. Firstly, it is much more cost effective to upsell your current customers than to convert new ones. (the figures are different for different industries, but in banking, for example, it costs about $5k to convert a new customer). And secondly, it’s just plain rude.
 
While the big kids are fighting, come in from a different angle. That is exactly what Red Bull did. At not even 10 years old it is the 3rd most valuable soft drink globally – outselling Pepsi in 2015.
 
Even though our businesses are small (tiny, minute) compared to these 2 giants there is much we can learn from them in the way we run our businesses.